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La. Civ. Code art. 1847 defines fraud, as it applies to contracts, as the cause of an error bearing on a material part of the contract, created or continued by artifice, with design to obtain some unjust advantages to the one party, or to cause an inconvenience or loss to the other.
Willie Sims found a diamond ring mounted in platinum with other precious stones. Sims brought the ring to his wife, who began to wear it in such a manner that it was clearly visible to anyone. Wilbert Jackson, an employee of en Roumain, a jeweler in the City of Baton Rouge, saw the ring on the finger of Sims' wife; and being friendly with the Sims, he suggested to them that the ring may be valuable and that they should have it tested by a reputable jeweler. Jackson had some seven years' experience as an employee of Roumain and necessarily must have acquired some knowledge of the values of gems. Sims took the ring to Roumain's Jewelry Store where plaintiff Griffing, a co-employee of Jackson, offered to buy or sell the ring for $130. Sims agreed, and was paid $120, with the assurance that the balance would be paid within a few days. Shortly after the purchase, the police confiscated the ring from plaintiff, having suspected that it had been stolen. Plaintiff filed an action against the police, and Sims intervened, seeking the return of the ring. The trial court entered judgment in favor of plaintiff. Sims appealed, arguing that the sale of the ring was induced by fraud on the part of the plaintiff.
Was the sale of the ring induced by fraud on the part of the plaintiff, thereby entitling Sims to recover the ring?
The court reversed the trial court’s decision, and held that the purchase of the ring was accompanied by fraud. The court found that the plaintiff had withheld information from the ring owner that resulted in an advantage in favor of the plaintiff, who was much more learned in valuing the ring. The court stated that the plaintiff had possessed superior knowledge regarding the value of the ring, which required a full disclosure to the ring owner upon being asked because a quasi-fiduciary relationship had been formed when the ring owner went to the jewelry store.